For any small or middle power looking to emerge as a strong contender within the complex global semiconductor value chain evolving around the US-China tech rivalry, four central prescripts from Vietnam’s approach are noteworthy.
1. Build the basics
Over the past decade, Vietnam has focused on building a strong base in assembly, testing and packaging (ATP), the last stage of the semiconductor value chain before chips are shipped to customers. Vietnam made its name as a “reliable backend” by attracting investments from global leaders such as Intel, while also encouraging foreign investments in local companies for ATP.
This strong backend is the fundamental enabler fuelling Vietnam’s bid to move up the value chain into design and fabrication.
2. Clustering and agglomeration
Vietnam has further sought to build a local supplier base in the country in a manner that has made it indispensable to the global high-tech supply chain. Leading chipmakers such as Samsung procure their components from Vietnam-based suppliers. This clustering has also been facilitated by infrastructure and skill development.
3. A comprehensive approach
Vietnam’s 2024 National Strategy on Semiconductors and the 2025 Law on Digital Technology Industry views the semiconductor industry and its stages in a “comprehensive and complete” way, aiming to transform Vietnam into a key supplier of semiconductors by 2050.
These policies entail clear direction and seek to align the various elements and facilitators of the complex chips ecosystem including STEM talent, industrial modernisation and infrastructure development.
4. Leveraging strengths
Hanoi efficiently leverages niche strengths in STEM talent, low labour costs as well as ATP to negotiate from a position of strength and attract leading tech companies. Strategic efforts have also been made to capitalise on Vietnam’s abundance in Rare Earth Elements.
In December 2025, the government of Vietnam voted to terminate the exports of REEs. In addition to bolstering the country’s position in the global technology value chain, it points to Hanoi’s strategic practice of economic statecraft.